Screening the Large Dividend Plays

Although I focus mainly on small and micro-cap companies, they certainly aren't the only game in town. In fact, when it comes to dividend growth, the majority of candidates are the larger names.

Here, yield also plays a role. In my small search for small-cap dividend growers, I ignore the level of yield because some of the companies don't have a long operating history and still may be in a growth phase. As such, they don't tend to be high yielders. With the larger names, you can find the best of both worlds in growing dividends and decent yields.

With that in mind, I utilized the following criteria in my search:

• Market caps greater than $2 billion

• Dividend increases in at least each of the past five years

• Long-term debt-to-equity ratios below 50%

• Dividend payout ratios below 50% for the trailing 12 months, and last two fiscal years

Moving forward, especially in the current highly volatile market, it will be interesting to track how the 32 names perform. Given the average yield of about 2.8%, I would expect this group to have a smoother ride than the broader markets, but we'll see.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.